3/1. Karel De Gucht, the European Trade Commissioner, gave a speech in Brussels regarding the recently negotiated Anti-Counterfeiting Trade Agreement (ACTA). He argued that "Europe needs ACTA" and that the European Parliament should "consider the agreement favourably".

He also responded to hackers who have defaced government web sites in the name of ACTA opposition, and critics who have misrepresented its contents. See, AP story published in USA Today on February 17, 2012, titled "FTC sites hacked by Anonymous".

The ACTA [52 pages in PDF] is an agreement between the European Union and its Member States, Australia, Canada, Japan, Korea, Mexico, Morocco, New Zealand, Singapore, Switzerland, and the US.

For background on the ACTA, see story titled "ACTA Signing Set for October 1 in Tokyo" in TLJ Daily E-Mail Alert No. 2,305, September 28, 2011, and stories titled "ACTA Draft Released", "Summary of ACTA", and "Reaction to ACTA" in TLJ Daily E-Mail Alert No. 2,140, October 11, 2010.

See also, De Gucht's February 22 statement regarding the ACTA.

De Gucht (at left) said in his March 1 speech that "in Europe we have a comprehensive system to protect intellectual property. We have outlined the rights that can be protected and the means to enforce them. We have implemented that programme in the Member States together with their authorities." And, "What the European Union is trying to do with this agreement is to extend the reach of the enforcement parts of our system beyond our borders."

"ACTA is an enforcement treaty. That means it does not cover the details of what is legal and what is illegal. But it does address procedures for ensuring that what is illegal can be redressed."

He continued that the ACTA is a "relatively modest agreement between a relatively small number of countries. But it is a significant first step. It establishes a nucleus of countries that are committed to the highest standards of intellectual property rights enforcement. A nucleus that will grow."

He condemned the use of "cyber-attacks on democratic institutions" by some of the opponents of the ACTA.

He also said that many of the allegations of opponents of the ACTA are false. He stated that "I have read that ACTA restricts free speech, that it will ``break´´ the internet, and that sick people in developing countries should be particularly on their guard. And yet as someone responsible for negotiating the agreement, I know that ACTA does not do any of those things."

He elaborated that the "ACTA is not an attack on your liberties; it is a defence of your livelihoods. ACTA will not censor the internet. It will not mandate monitoring or controls on people's e-mails, their blogs or their file-sharing activities. ACTA will not require the inspection of laptops or MP3 players by customs officials. And ACTA will not impose any restrictions on trade in generic medicines."

In sum, he said, "there will be no change whatsoever to the current balance of rights and safeguards for European citizens. Except, of course, that their inventions will be better protected around the world."

He also stated that the "ACTA does not have an international dispute settlement or arbitration procedure. This means that the final word regarding the interpretation of its provisions will belong to each jurisdiction. In Europe that means that our courts, including the European Court of Justice, will be responsible for its interpretation."

3/8. The US China Economic and Security Review Commission released a report [139 pages in PDF] titled "Occupying the Information High Ground: Chinese Capabilities for Computer Network Operations and Cyber Espionage". It finds that "Chinese capabilities in computer network operations have advanced sufficiently to pose genuine risk to U.S. military operations in the event of a conflict." See, also summary.

The report states that the People's Republic of China's (PRC) People's Liberation Army's (PLA) "sustained modernization effort over the past two decades has driven remarkable transformation within the force and put the creation of modern command, control, communications, computers, intelligence, surveillance, and reconnaissance (C4ISR) infrastructure at the heart of the PLA's strategic guidelines for long term development."

"This priority on C4ISR systems modernization, has in turn been a catalyst for the development of an integrated information warfare (IW) capability capable of defending military and civilian networks while seizing control of an adversary's information systems during a conflict."

It also states that "PLA analysts consistently identify logistics and C4ISR infrastructure as U.S. strategic centers of gravity suggesting that PLA commanders will almost certainly attempt to target these system with both electronic countermeasures weapons and network attack and exploitation tools, likely in advance of actual combat to delay U.S. entry or degrade capabilities in a conflict", such as in defending Taiwan against PRC aggression.

One of the topics addressed in this report is supply chain vulnerabilities. It states that "The pervasiveness of globally distributed supply chain networks means that virtually every sector of private industry has the potential to be impacted by a compromise."

"The vectors into the telecommunications and integrated circuit (IC) supply chain specifically can come from either upstream (manufacturing channels) or downstream (distribution channels)." The report states that "The geographically distributed nature of IC production means that a single chip may incorporate circuits designed in multiple locations around the globe. This model reduces the cost of new product development but it also creates additional security and integrity risks." (Parentheses in original.)

It concludes that "Without strict control of this complex upstream channel, a manufacturer of routers, switches, or other basic telecommunications hardware is exposed to innumerable points of possible tampering and must rely on rigorous and often expensive testing to ensure that the semiconductors being delivered are trustworthy and will perform only as specified, with no additional unauthorized capabilities hidden from view. Deliberate modification of semiconductors upstream of final product assembly and delivery could have subtle or catastrophic effects."

3/7. The House Ways and Means Committee (HWMC) held a hearing titled "President Obama's Trade Policy Agenda" on February 29, 2012. The Senate Finance Committee (SFC) held a hearing titled "The President's 2012 Trade Agenda" on March 7, 2012. Ron Kirk, the U.S. Trade Representative, addressed trade with the People's Republic of China (PRC), and other topics, at both hearings. See, prepared testimony for HWMC, and substantially similar prepared testimony for SFC.

Kirk (at right) said that "we continue to seek market access in China for suppliers of electronic payment services as China effectively blocks U.S. and other foreign suppliers from participating in China's large and growing market for card-based transactions".

He said that the US "will use all available tools in 2012 to ensure that China engages in fair play on trade and that U.S. exporters have a fair shot to compete in China. In addition to enforcement efforts that aim to end discriminatory policies and unfair subsidies, we will also continue to press China -- through the Strategic & Economic Dialogue, the Joint Commission on Commerce and Trade, and other ongoing engagement -- to open investment opportunities, to complete negotiations to join the WTO Government Procurement Agreement by offering comprehensive coverage of its procurement, and to increase transparency and eliminate market access barriers and distortions in areas ranging from agricultural goods to services."

He continued that "This year, the Administration will also seek China's complete implementation of its commitments to strengthen IPR protection and enforcement, including eliminating the use of illegal software by Chinese government entities. Likewise, focus will remain on ensuring an end to discriminatory ``indigenous innovation´´ policies, as the Administration continues its efforts to protect the value of U.S. intellectual property and technology in China and support IP-related American jobs here at home."

He added that "This month's agreement between China and the United States to significantly increase market access for imported movies is a positive development in this regard". See, story titled "PR China Agrees to Improve Market Access for US Movie Companies" in TLJ Daily E-Mail Alert No. 2,343, February 21, 2012.

Kirk also said that the US will "press China to move promptly to remove their improper export restrictions on key industrial raw materials."

Rare earth elements, such as Neodymium, are used to make permanent magnets, which are used in computer hard drives and other tech products.

See also, stories titled "OUSTR Is Considering Filing WTO Complaint Against PRC For Its Rare Earths Export Restraints", "PRC Further Curtails Exports of Rare Earths", and "Molycorp and Hitachi Plan Joint Ventures for Production of Rare Earth Magnets" in TLJ Daily E-Mail Alert No. 2,189, December 29, 2010, and story titled "Update on Rare Earth Materials Legislation" in TLJ Daily E-Mail Alert No. 2,261, July 17, 2011.

Kirk also addressed Russia, which is scheduled to join the World Trade Organization (WTO) this year.

He said that "the Administration is seeking legislation from Congress to ensure that American firms and American exporters enjoy the same job-supporting benefits of Russia’s membership in the WTO rules-based system as our international competitors. Specifically, we must work together to terminate application of the Jackson-Vanik Amendment and authorize the President to extend permanent normal trade relations status to Russia as soon as possible."

He also said that "We remain open to pursuing progress under the framework of the Doha Round".

Sen. Max Baucus (D-MT), Chairman of the SFC, wrote in his opening statement that "We should set three major trade goals for 2012: approving permanent normal trade relations with Russia; concluding the Trans-Pacific Partnership negotiations; and addressing the challenges posed by China." He added that "Congress must repeal the Jackson-Vanik amendment and establish permanent normal trade relations with Russia, known as PNTR."

The Obama administration has not negotiated any bilateral free trade agreements (FTAs). It lacks the trade promotion authority (TPA) that the Congress gave the President in 2002, and that has expired. The Obama administration belatedly implemented FTAs with Korea, Columbia and Panama concluded during the Bush administration under TPA. Moreover, President Obama has not sought a renewal of TPA.

Kirk said that the Obama administration has ambitious plans to "open new markets for U.S. exporters and level the playing field for American farmers, ranchers, businesses, and workers".

Sen. Orrin Hatch (R-UT), the ranking Republican on the SFC, wrote in his opening statement that "President Obama is satisfied with just nibbling at the edges of a comprehensive and coherent trade agenda. It is time to move past the achievements made possible under Trade Promotion Authority of 2002 ".

He argued that "The President's new top legislative trade priority, securing permanent normal trade relations with Russia, is a poor substitute. The President would have Congress pass PNTR and ignore Russia’s rampant corruption, theft of U.S. intellectual property, poor human rights record, and adversarial foreign policies for a market that amounts to .05 percent of U.S. exports. Moreover, it is a market we will have access to anyway on an MFN basis under the terms of our 1992 trade treaty once Russia joins the WTO."

3/7. The House and Senate passed HR 4105 [LOC | WW], an untitled bill regarding the application of countervailing duties (CVDs) to non-market economies -- especially, the People's Republic of China (PRC). It reverses the effect of a recent opinion of the Court of Appeals.

Rep. Dave Camp (R-MI) introduced this bill on February 29, 2012. The House passed it on March 6, 2012, by a vote of 370 to 39. See, Roll Call No. 96. All of the no votes were cast by Republicans. The Senate passed this bill on March 7, 2012, without amendment, by unanimous consent.

Rep. Camp stated in the House that this bill ensures "that we can continue to fight unfair subsidies from countries like China that violate the WTO, injure our industries, and cost U.S. jobs. This legislation reaffirms that our antisubsidy laws, or countervailing duty laws, apply to subsidies from China and other nonmarket countries, and it overturns an erroneous decision by the Federal circuit that the Department of Commerce does not have the authority to apply these countervailing duty rules to nonmarket economies."

This bill is a response to the December 19, 2011, opinion [26 pages in PDF] of the U.S. Court of Appeals (FedCir) in GPX v. US.

Rep. Camp continued that "China distorts the free market by giving enormous subsidies to its producers and exporters, and our companies and our workers should not be expected to compete against the deep pockets of the Chinese Government. That is why it is vital that we preserve this important tool and ensure that current countervailing duty orders and investigations from nonmarket economies remain in place and that this important tool is available in the future."

Countervailing duties are applied to subsidized exports. And, GPX v. US involved tires. However, some members of Congress took this occasion to also complain about the PRC's failure to protect and enforce intellectual property rights of U.S. rights holders.

For example, Rep. Kevin Brady (R-TX) stated that "this legislation ensures the freedom of U.S. companies and workers to compete in a market that is not distorted by the Chinese Government. It restores free market principles by allowing us to address China's unfair subsidies. It has no different impact on consumers than enforcing our intellectual property laws."

Rep. Earl Blumenauer (D-OR) said that in addition to "massive unjustified subsidies", "We've found cheating in the international arena in terms of stealing intellectual products ..."

Rep. Sheila Lee (D-TX) said that "China's inadequate protection of intellectual property rights has also been a major concern."

The Federal Circuit case is International Tire Corporation and Tianjin United Tire & Rubber International Co., LTD v. U.S., U.S. Court of Appeals for the Federal Circuit, App. Ct. Nos. 2011-1107, 2011-1108, and 2011-1109, an appeal from the U.S. Court of International Trade, No. 08-CV-0285.

The House will meet at 10:00 AM for morning hour, and at 12:00 NOON for legislative business. See, Rep. Cantor's schedule for the week. The House will begin consideration of HR 3606 [LOC | WW], the "Reopening American Capital Markets to Emerging Growth Companies Act of 2011". See, story titled "House Financial Services Committee to Mark Up Bill to Provide Regulatory Relief to Emerging Growth Companies" in TLJ Daily E-Mail Alert No. 2,336, February 14, 2012.

8:30 AM - 12:00 NOON. The National Aeronautics and Space Administration's (NASA) NASA Advisory Council's Information Technology Infrastructure Committee will meet. See, notice in the Federal Register, Vol. 77, No. 27, Thursday, February 9, 2012, at Page 6825. Location: NASA, 300 E. St., SW.

9:00 AM. The House Appropriations Committee's (HAC) Subcommittee on Commerce, Justice, Science, and Related Agencies will hold a hearing on the FY 2013 budget for the Department of Justice (DOJ). The witness will be Robert Mueller (FBI Director) See, notice. Location: Room 2359, Rayburn Building.

10:00 AM. The House Foreign Affairs Committee (HFAC) will meet to mark up several bills, including HR 4041, the "Export Promotion Reform Act", and SConRes 17, a resolution that expresses the sense of Congress that Taiwan should be accorded observer status in the International Civil Aviation Organization (ICAO). See, notice. Location: Room 2172, Rayburn Building.

10:00 AM. The House Commerce Committee's (HCC) Subcommittee on Subcommittee on Communications and Technology will hold a hearing titled "Cybersecurity: The Pivotal Role of Communications Networks". The witnesses will be Edward Amoroso (AT&T), David Mahon (Century Link), Jason Livingood (Comcast), John Olsen (MetroPCS Communications), and Scott Totzke (Blackberry Security Group, Research In Motion). See, notice. Location: Room 2123, Rayburn Building.

10:00 AM. The Senate Finance Committee (SFC) will hold a hearing titled "The President’s 2012 Trade Agenda". The witness will be Ron Kirk (U.S. Trade Representative). See, notice. Location: Room 215, Dirksen Building.

12:15 - 1:45 PM. The Federal Communications Bar Association (FCBA) will host a brown bag lunch titled "TV Whitespace". For more information, contact Scott Goodwin at sgoodwin at nab dot org. Location: National Association of Broadcasters (NAB), 1771 N St., NW.

2:00 - 3:30 PM. The Department of Justice's (DOJ) Antitrust Division will host a presentation titled "Market Thickness and Market Efficiency in Dynamic Auctions". The speaker will be Alan Sorensen (University of Wisconsin) author of a paper with the same title. For more information, contact Thomas Jeitschko at 202-532-4826 or atr dot eag at usdoj dot gov. Location: Liberty Square Building, 450 5th St., NW.

The House will meet at 10:00 AM for morning hour, and at 12:00 NOON for legislative business. See, Rep. Cantor's schedule for the week. The House will continue its consideration of HR 3606  [LOC | WW], the "Reopening American Capital Markets to Emerging Growth Companies Act of 2011". See, story titled "House Financial Services Committee to Mark Up Bill to Provide Regulatory Relief to Emerging Growth Companies" in TLJ Daily E-Mail Alert No. 2,336, February 14, 2012.

9:00 AM. The House Intelligence Committee (HCC) will hold a brief open event titled "Committee Views and Estimates on the President's Budget for Fiscal Year 2013". See, notice. Location: Room HVC-304, Capitol Visitor Center.

9:15 AM. The House Intelligence Committee (HCC) will hold a closed hearing titled "Ongoing Intelligence Activities". See, notice. Location: Room HVC-304, Capitol Visitor Center.

9:00 - 10:30 AM. The Information Technology and Innovation Foundation (ITIF) and the Kaufman Foundation will host an event to release a report titled "The Global Innovation Policy Index". The speakers will be Robert Atkinson (ITIF), Philip Auerswald (Kaufman Foundation), Thomas Kalil (EOP's OSTP), Eric Miller (Industry Canada), and Steven Stewart (IBM). See, notice. Location: ITIF/ITIC: Suite 610, 1101 K St., NW.

10:00 AM. The Senate Appropriations Committee (SAC) will hold a hearing on the FY 2013 budget for the Department of Justice (DOJ). The witness will be Attorney General Eric Holder. See, notice. Location: Room 124, Dirksen Building.

10:00 AM - 12:00 NOON. The House Science Committee's (HSC) Subcommittee on Research and Science Education will hold a hearing titled "NSF Major Research Equipment and Facilities Management". The HSC will webcast this event. Location: Room 2318, Rayburn Building.

10:00 AM. The Senate Judiciary Committee (SJC) will hold an executive business meeting. The agenda includes consideration of Patty Shwartz (to be a Judge of the U.S. Court of Appeals for the 3rd Circuit), Jeffrey Helmick (USDC/NDOhio), Mary Lewis (USDC/DSCar), and Timothy Hillman (USDC/DMass). The SJC will webcast this event. See, notice. Location: Room 226, Dirksen Building.

2:30 PM. The Senate Intelligence Committee (SIC) will hold a closed meeting. See, notice. Location: Room 219, Hart Building.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Public Notice (PN) [21 pages in PDF] regarding Auction 901, which will auction high cost universal service subsidies through reverse competitive bidding. It is also titled "Mobility Fund Phase I Auction". The FCC released this PN on February 2, 2012. It is DA 12-121 in AU Docket No. 12-25. See also, notice in the Federal Register, Vol. 77, No. 28, Friday, February 10, 2012, at Pages 7152-7162.

The House will not meet the week of Monday, March 12, through Friday, March 16.

10:30 AM. The Senate Judiciary Committee (SJC) will hold a hearing titled "The Freedom of Information Act: Safeguarding Critical Infrastructure Information and the Public’s Right to Know". The SJC will webcast this event. See, notice. Location: Room 226, Dirksen Building.

2:30 PM. The Senate Intelligence Committee (SIC) will hold a closed meeting. See, notice. Location: Room 219, Hart Building.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response the FCC's Public Notice (PN) regarding LightSquared's Petition for Declaratory Ruling. The FCC released this PN on January 27, 2012. See also, correction to this PN, also released on January 27. This PN is DA 12-103 in IB Docket No. 11-109 and ET Docket No. 10-142.

12:30 - 2:00 PM. The DC Bar Association's Media Law Committee will host a closed brown bag lunch meeting to discuss media and communications law developments. Free. No CLE credits. Reporters are barred from covering this event. events. For more information, contact the DC Bar at 202-626-3463 or Kurt Wimmer (Covington & Burling) at kwimmer at cov dot com or Jim McLaughlin at mclaughlinj at washpost dot com. See, notice. Location: Covington & Burling, 1201 Pennsylvania Ave., NW.

2/28. The House Judiciary Committee (HJC) approved HR 3992 [LOC | WW], a short bill that adds Israel to the countries eligible for E-2 visas, which allow foreign investors to travel to the US. This is conditioned upon reciprocal treatment from Israel for US investors.

Rep. Howard Berman (D-CA) introduced this bill on February 9, 2012. Rep. Lamar Smith (R-TX), Rep. Zoe Lofgren (D-CA), and Rep. Ileana Ros-Lehtinen (R-FL) are the original cosponsors.

Sen. Charles Schumer (D-NY) and others introduced the companion bill in the Senate, S 921 [LOC | WW], on May 9, 2011.

These bills would add Israel to the countries covered by both 8 U.S.C. § 1101(a)(15)(E)(i) and (ii), which pertain to "an alien entitled to enter the United States ... solely to carry on substantial trade, including trade in services or trade in technology, principally between the United States and the foreign state of which he is a national" or "solely to develop and direct the operations of an enterprise in which he has invested, or of an enterprise in which he is actively in the process of investing, a substantial amount of capital".

3/7. The Executive Office of the President (EOP) announced in a release the opening of two units pertaining to the regulation of exports -- the Export Enforcement Coordination Center (EECC) and the Information Triage Unit (ITU). The EOP release states that the EECC "is responsible for enhanced information sharing and coordination between law enforcement and intelligence officials regarding possible violations of U.S. export controls laws." It is administered by the Department of Homeland Security (DHS), with input from the Federal Bureau of Investigation (FBI) and the Department of Commerce (DOC). This release also states that the ITU is a multi-agency unit located at the DOC that "is responsible for assembling and disseminating relevant information, including intelligence, from which to base informed decisions on proposed exports requiring a U.S. Government license". This is part of the Obama administration's ongoing efforts to reform of the export regulation process. See also, President Obama's December 9, 2010, speech, and story titled "Obama Addresses Export Control Reform Process" in TLJ Daily E-Mail Alert 2,185, December 21, 2010.

3/7. The House Foreign Affairs Committee (HFAC) approved HR 4041 [LOC | WW], the "Export Promotion Reform Act", a bill which pertains to the export promotion duties of the interagency Trade Promotion Coordinating Committee (TPCC) and the Department of Commerce (DOC).

3/7. The House Foreign Affairs Committee (HFAC) approved SConRes 17 by unanimous consent. This resolution expresses the sense of Congress that Taiwan should be accorded observer status in the International Civil Aviation Organization (ICAO). The Senate Foreign Relations Committee (SFRC) approved this resolution on July 26, 2011, and the full Senate passed it on September 21, 2011.

2/29. A grand jury of the U.S. District Court (DC) returned a five count criminal indictment that charges ICM Components, Inc., and its general manager, David Levick, with violation of U.S. export control laws in connection with their export of vertical gyroscopes and other aerospace products  to Iran. The Department of Justice (DOJ) stated in a release that the indictment alleges "conspiracy to defraud the United States and to violate the International Emergency Economic Powers Act (IEEPA) and the Arms Export Control Act; as well as four counts of illegally exporting goods to an embargoed nation in violation of IEEPA". The release adds that ICM is an Australian corporation, and that Levick is at large in Australia. However, the goods involved were of U.S. origin.

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